PDS foodgrains to cost less

By Gargi Parsai

NEW DELHI, JUNE 6. The Ministry of Food and Civil Supplies proposes to reduce the central issue price of foodgrains distributed under the Public Distribution System (PDS) and the Food-For-Work Scheme to increase the offtake and reduce stocks in preparation for the kharif season. Foodgrain stocks in the central pool as on April 1 were about 447 lakh tonnes against a buffer norm of 158 lakh tonnes on that date.

The PDS rates are proposed to be slashed to about 75 per cent of the economic cost for the Above Povertyline Population (APL) and about 45 per cent for the Below Povertyline Population (BPL). At present, the costing is done at 100 per cent of the economic cost for APL and 50 per cent for BPL. The economic cost for wheat is Rs 8.30 paise per kg and for rice, Rs. 11.30 paise per kg.

The price of grains supplied under the Food-For-Work programme is proposed to be reduced to the discounted Antodaya rates of Rs. 2 per kg for wheat and Rs. 3 per kg for rice for all, without the distinction of APL and BPL. The Government has made an allocation of 30 lakh tonnes to States under this scheme. For drought-hit States it is free.

Although several permutations and combinations are being worked out, the Ministry of Food and Civil Supplies headed by Mr. Shanta Kumar is keen to reduce the price of PDS grains to below open market levels, both for wheat and rice, which will entail an estimated subsidy of up to Rs. 3000 crores. This is to clear stocks, enhance offtake and reduce carrying costs. Offtake in the BPL category is about 50 per cent of the allocation and in the APL category, it is negligible.

The new thinking is based on the recommendation of the high-level Abhijit Sen Committee on formulating a long-term Grain Policy which had suggested that the foodgrain price for the APL be revised downwards and that the levies be discounted from the economic cost to the Food Corporation of India for distribution of grains.

What the Ministry is pushing for is removal of statutory levies on purchase of foodgrains by the Food Corporation of India (FCI) which amounts to about 14 per cent. The Committee had suggested that the levies be given as grant to the States by the Finance Ministry thus reducing the economic cost of foodgrains.

The Ministry is in the process of circulating its proposal to related Ministries and will bring it before the Cabinet for approval soon.

Send this article to Friends by E-Mail

Section  : Front Page
Previous : 'Centre will help nab Veerappan'
Next     : 'Jayalalitha keen on third alternative'